In 1814 he became a partner in the company. In 1816 McLoughlin was arrested for the murder of Robert Semple, the governor of the Red River Colony, after the Battle of Seven Oaks, though it is often claimed he stood in proxy for some Indians who were blamed. He was tried on October 30, 1818, and the charges were dismissed. McLoughlin was instrumental in the negotiations leading to the North West Company's 1821 merger with the Hudson's Bay Company. He was promoted to head the Lac la Pluie district temporarily shortly after the merger.

In the 1821 merger with the North West Company, the Hudson's Bay Company gained control of NWC trading posts west of the Rocky Mountains, with headquarters at Fort George (formerly Astoria).[2]George Simpson, Governor of Hudson's Bay Company, visited the Columbia District in 1824-25, journeying from York Factory. He investigated a quicker route than previously used, following the Saskatchewan River and crossing the mountains at Athabasca Pass. This route was thereafter followed by the York Factory Express brigades.[3]

McLoughlin built Fort Vancouver (now Vancouver, Washington) as a replacement for Fort George, on the north side of the Columbia across from the mouth of the Willamette River, at a site chosen by Sir George Simpson. The post was opened for business on March 19, 1825. From his Columbia Department headquarters in Fort Vancouver he supervised trade and kept peace with the Indians, inaugurated salmon and timber trade with Mexican controlled California and Hawaii, and supplied Russian America with produce.

By 1825 there were usually two brigades, each setting out from opposite ends of the route, Fort Vancouver in the Columbia District on the lower Columbia River and the other from York Factory on Hudson Bay, in spring and passing each other in the middle of the continent. Each brigade consisted of about forty to seventy five men and two to five specially made boats and travelled at breakneck speed (for the time). Indians along the way were often paid in trade goods to help them portage around falls and unnavigable rapids. An 1839 report cites the travel time as three months and ten days—almost 26 miles (40 km) per day on average.[1] These men carried supplies in and furs out by boat, horseback and as back packs for the forts and trading posts along the route. They also carried status reports for supplies needed, furs traded etc. from Dr. John McLoughlin head of the Oregon Country HBC operations, and the other fort managers along the route.

Fort Vancouver became the center of activity in the Pacific Northwest. Every year ships would come from London to drop off supplies and trade goods in exchange for the furs. It was the nexus for the fur trade on the Pacific Coast; its influence reached from the Rocky Mountains to the Hawaiian Islands, and from Russian Alaska into Mexican-controlled California. From Fort Vancouver, at its pinnacle, McLoughlin watched over 34 outposts, 24 ports, six ships, and 600 employees. Under McLoughlin's management, the Columbia Department remained highly profitable, in part due to the ongoing high demand for beaver hats in Europe.

McLoughlin's appearance, 6 foot 4 inches (193 cm) tall with long, prematurely white hair, brought him respect; but he was also generally known for his fair treatment of the people with whom he dealt, whether they were British subjects, U.S. citizens, or of indigenous origin. At the time, the wives of many Hudson's Bay field employees were indigenous, including McLoughlin's wife Marguerite; who was metis, the daughter of an aboriginal woman and one of the original partners of the North West Company, Jean-Etienne Wadin. She was the widow of Alexander McKay, a trader killed in the Tonquin incident. See Jonathan Thorn. Her son Thomas McKay became McLoughlin's stepson.[4]

When three Japanese fishermen, among them Otokichi, were shipwrecked on the Olympic Peninsula in 1834, McLoughlin, envisioning an opportunity to use them to open trade with Japan, sent the trio to London on the Eagle to try to convince the Crown of his plan.[5] They reached London in 1835, probably the first Japanese to do so since the 16th century Christopher and Cosmas. The British Government finally did not show interest, and the castaways were sent to Macau so that they could be returned to Japan, but that was not possible as Japan was closed to most outsiders at the time.

In 1821 the British Parliament imposed the laws of Upper Canada on British subjects in Columbia District, and gave the authority to enforce those laws to the Hudson's Bay Company. John McLoughlin, as Superintendent of Fort Vancouver, applied the law to British subjects, kept peace with the natives and sought to maintain law and order over American settlers as well.

In the early 1840s, with the arrival of the first wagon trains via the Oregon Trail, McLoughlin disobeyed company orders and extended substantial aid to the American settlers. Relations between Britain and the United States had become very strained, and many expected war to break out any time. McLoughlin's aid probably prevented an armed attack on his outpost by the numerous American settlers. The settlers understood that his motives were not purely altruistic, and some resented the assistance, working against him for the rest of his life.

The Hudson Bay Company officially discouraged settlement because it interfered with the lucrative fur trade. The company belatedly realized that the increasing numbers of American settlers in the area would result in Columbia District becoming part of U.S. territory. In 1841, Hudson Bay Company Governor George Simpson ordered Alexander Ross to organize a party of Red River settlers to emigrate and occupy the land for Britain. James Sinclair took over leadership from Ross, and when the expedition of almost 200 men women and children reached Fort Vancouver later that year most were settled on Hudson's Bay farms at Nisqually and Cowlitz and some settled south of the Columbia River In the Willamette Valley

McLoughlin was involved with the debate over the future of the Oregon Country.[6] He advocated an independent nation that would be free of the United States during debates at the Oregon Lyceum in 1842 through his lawyer.[6] This view won support at first and a resolution adopted, but was later moved away from in favor of a resolution by George Abernethy of the Methodist Mission to wait on forming an independent country.[6]

In 1843 American settlers established their own government, called the Provisional Government of Oregon. A legislative committee drafted a code of laws known as the Organic Law. It included the creation of an executive committee of three, a judiciary, militia, land laws, and four counties. There was vagueness and confusion over the nature of the 1843 Organic Law, in particular whether it was a constitutional or statutory. In 1844 a new legislative committee decided to consider it statutory. The 1845 Organic Law made additional changes, including allowing the participation of British subjects in the government. Although the Oregon Treaty of 1846 settled the boundaries of US jurisdiction upon all lands south of the 49th parallel, the Provisional Government continued to function until 1849, when the first governor of Oregon Territory arrived.

After resigning from the Hudson's Bay Company in 1846, McLoughlin moved his family back south to Oregon City in the Willamette Valley. The Oregon Treaty had been ratified by that time, and the region, now known as the Oregon Territory, was part of the United States. The valley was the destination of choice for settlers streaming in over the Oregon Trail. At his Oregon City store he sold food and farming tools to settlers. In 1847, McLoughlin was given the Knighthood of St. Gregory, bestowed on him by Pope Gregory XVI. He became a U.S. citizen in 1849. McLoughlin's opponents succeeded in inserting a clause forfeiting his land claim in the Donation Land Claim Act of 1850 by Samuel R. Thurston. Although it was never enforced, it embittered the elderly McLoughlin. He served as mayor of Oregon City in 1851, winning 44 of 66 votes. He died of natural causes in 1857. His grave is now located beside his home overlooking downtown Oregon City.[7]

John McLoughlin lost one son to a violent death. John McLoughlin, Jr. had been appointed the second Clerk in Charge at Fort Stikine, only to die in April 1842 at the hands of one of the fort employees, Urbain Heroux, who was charged with his murder but acquitted for lack of evidence, which added to the grievances John Sr. held against the Company. In 2015, Goose Lane Editions published The Bastard of Fort Stikine by author Debra Komar. The book is both a historical look at McLoughlin, Jr.'s violent death and a true crime investigation into the circumstances of his death.